Consumer Protection Submission

15 January 2002 – A SUBMISSION BY AER TO THE EUROPEAN COMMISSION REGARDING THE GREEN PAPER ON EU CONSUMER PROTECTION

Brussels-based AER (the Association of European Radios) represents the interests of 12 national private radio associations in ten EU Member States and Switzerland, whose combined membership is approximately 4,500 private/commercial radio stations.

Introduction

AER welcomes the opportunity to submit its views on the European Commission Green Paper on EU Consumer Protection. Commercial radios agree with the general idea of improving consumer protection in the European Union. Thus, we recognise that new initiatives may be needed to improve the “Business to Consumers” Internal Market, mainly in the light of technological developments that allow companies to offer their services at pan-European level much more easily (i.e. Internet).

AER also believes that this Green Paper represents a good opportunity to bring businesses and consumers together to exchange views on issues of common interest. The interests of consumers are at the heart of our business. Certainly to commercial radio stations, it is important that consumers – our listeners – are happy and feel confident with our services. Our success lies on our ability to talk directly to our consumers.

Having said this, we believe that given the great importance of this debate, it is disappointing to see the limited options offered by the Commission in its Green Paper.

I. Definitions

The Green Paper proposals rest upon the definitions given to key terms such as “fair trade”, “self-regulation” and “co-regulation”. However, the Commission provides no definition of these terms. Self-regulation and co-regulation exist in the EU Member States to differing levels and these terms are subject to different interpretations by industry sectors, national governments and EU institutions. Therefore, in our view, the Commission has yet to provide a definition and interpretation of what is fair and unfair. Until clear definitions are given, it is almost impossible for industry to evaluate the likely impact and efficacy of the proposals presented in the Green Paper.

II. Commission regulatory proposals

The Commission proposes two options to improve consumer protection: further harmonisation addressing specific issues (specific approach), or a new framework directive (mixed approach).

It is surprising that the Commission, although it proposes two options, only develops the second one in any detail (the so-called “mixed approach”). This indicates to us that the Commission may have already taken a “pre-decision” about the direction to be followed. We don’t think this is helpful at this stage.

As far as the options proposed are concerned, the Commission argues that they would remove burdens from industry by replacing existing divergent national regulation. If this is to be achieved then the Commission needs also to specify opportunities for a measure of de-regulation. Without this, the proposals will add to existing regulation in many Member States. AER is against this.

AER believes regulation should be kept to the minimum necessary to allow flexibility. Broadcasting is already a very highly regulated sector at national level. Therefore, more regulation would come as an extra burden that would hinder new services from being successfully launched. In our view, the Commission should carry out a full regulatory impact assessment before proceeding.

Based on this, AER is more in favour of option one: a “specific approach”. In our view, legislation should be drafted in those cases where a need for harmonisation has been clearly identified. The Commission’s proposal on a Regulation on Sales Promotion is a good example of removing restrictions where it has been deemed necessary, not only by institutions but also by industry and consumers.

AER doubts that a framework directive supplemented by targeted directives would add any value to what is already in place at national level. In our view, it would only represent further unnecessary burdens.

Furthermore, AER believes that the only way to achieve a true internal market, which recognises the different national characteristics, is to continue to use the “country of origin” approach and the principle of “mutual recognition”. These tools have been successfully adopted in many Community directives such as the “E-commerce” and the “TV without Frontiers” Directive.

III. Self-regulation

Advertising is the main source of income for commercial radios and, therefore, a matter of great importance to AER. The receipts from advertising encourage a diversity of services, which guarantee plurality of opinion.

Self-regulatory codes are particularly important in the advertising sector because too often primary legislation is not equipped to keep up with constant developments. Self-regulation, as a complement to existing laws and as an effective complaint resolution mechanism, is operating successfully in many countries. Thus, in our view, it would be more effective to build on existing self-regulatory models than to build a totally new procedure.

We believe that self-regulation should remain nationally based in order to reflect the characteristics of each country. Therefore, we do not support the idea of agreeing a single code of conduct for the whole EU. We share however the Commission’s view that some important features should be common to all national systems.

In our view, it is the European industry itself that should be responsible for encouraging the examination of existing procedures and for strengthening cooperation among all parties, including consumers. The industry’s commitment is exemplified by its current work to strengthen the European Advertising Standards Alliance (EASA). Self-regulation codes are written by industry and monitored by independent bodies supported by industry. AER opposes the EC suggestion that there should be “legal consequences to codes”. This would detract from the priority of self-regulation that is to serve consumers effectively at a minimum cost.

In our view, the Commission should open a serious in-depth debate on selfregulation and co-regulation before formulating any legislative proposal.

IV. Future steps

AER invites the Commission to carry out further research into the need for any legislative proposals in this policy area. Furthermore, as we said earlier, the Commission should carry out a full regulatory impact assessment and should provide further clarification coupled with wide consultation to all parties. For AER, the next logical step for the Commission would be to present a White Paper.

ENDS
15/01/02

NOTE: The AER web site provides further information on membership www.aereurope.org